What is the focus of positive economics?

Positive economics focuses on objective statements about the economy that can be tested and validated through observation and evidence. It seeks to understand how economic systems operate by analyzing data and making factual claims about economic behavior and relationships without making judgments about whether those outcomes are desirable or not.

For instance, positive economics might study the relationship between unemployment rates and inflation, examining how changes in one variable can statistically correlate with changes in another. This approach allows economists to develop theories based on empirical evidence, which can then be evaluated through data analysis.

In contrast, prescriptive elements of economics would fall under normative economics, which involves opinions about what ought to be. Similarly, emphasizing subjective opinions steers away from the objectivity that defines positive economics. While abstract theories and models can be useful, they need to be grounded in observable phenomena to contribute effectively to positive economics. Therefore, the focus on objective statements makes positive economics distinct and reinforces its role in providing a factual basis for understanding economic behavior.